Nonprofit Cash Flow Management

June 28, 2011

Virginia National Bank Treasury Management Team

Steve Krohn – EVP and Managing Director

Ginger Germani – TM Officer

Carrie Gillispie – TM Representative

Brooke Jenkins – Merchant Card Representative

What Can Cash Flow Management Do for You?

Now that you have this information, how do you make it more valuable day to day for your organization?

• Goals• Tools• Obstacles/Barriers

Banking Tools to Save Time, Lower Costs & Increase Efficiency

Banking Tools to Save Time & Increase Efficiency

• Business Online

• Deposit Online

• ACH Transactions

Business Online

Business Online allows you to:

• View account balances and transaction details

• See current day deposit information

• Schedule future and recurring transfers between accounts

• Initiate direct deposit of payroll

Deposit Online – (Carrie)

Deposit Online enables you to:

• Save staff time by eliminating unnecessary trips to deposit checks

• Speed up your access to funds through timely, daily deposits

• Create your own check images and data

Deposit Online

ACH Transactions

ACH Payments are simply electronic transfers to or from one account and another account, even at another bank.

Common uses are:

• A donor makes regular, recurring contributions on a monthly or quarterly basis

• A customer pays service provider, such as utilities or rent

• Employer direct deposits payroll to employees

• Business pays supplier for products

ACH Transactions

ACH Transactions

Reducing Online Banking and Transaction Fraud Risks

Reducing Online Fraud Risk

• Dedicated “banking” computer

• Online authentication tools (i.e. tokens)

• Dual approval to move funds

• System level & User level transaction limits and service entitlements

Reducing Online Fraud Risk

Reducing Transaction Fraud Risks

• Required 48 hour bank notification

• Check Positive Pay

• Positive Pay Payee Verification

• ACH Positive Pay

Transaction Fraud Statistics

Association for Finance Professionals (“AFP”)

2011 Payments Fraud and Control Survey

http://www.afponline.org/pub/res/topics/topics_pay.html

Underwritten by J.P. Morgan and available generally from AFP at no charge once you’re a registered website user.

Transaction Fraud Statistics

Transaction Fraud Statistics

Merchant Processing Technology

Merchant Processing Technology

• Customization Capabilities

• Online Capabilities

• On-Site Event Capabilities

Merchant Processing Technology

Merchant Processing Technology

Merchant Processing Technology

Cash Planning

Cash Planning

• Understanding the FDIC limits

• CDARS

• Know Your Cash Flow

• Layering

• Laddering

FDIC Limits

• The FDIC insures up to $250,000 per entity in any one FDIC insured institution.

• Currently (June 28th, 2011) the FDIC provides unlimited coverage on deposits in non-interest bearing accounts.

• The FDIC no longer offers unlimited coverage on interest bearing accounts, as it did from 2008-2010.

CDARS

• CDARS (Certificate of Deposit Account Registry Service).

• Insures CDs up to $50,000,000.

• Provides higher rate than Treasuries.

• Approved for use by municipalities in 2007.

• One monthly statement, one 1099 for tax reporting.

• Less time spent tracking CDs spread all over town.

Know Your Cash Flow

• Monthly operating cash.

• Forecast funds based on business cycles, campaigns & large expenditures.

• What works this year will not always be the case next year.

• Is your current account structure manageable and is it making your organization the most money?

Layering Funds

• What types of accounts do you use and what benefit are you deriving from them?

• Use of multiple accounts can help you achieve greater interest earnings and is easy.

Layering Funds

Single Account Structure

• Interest Checking       $75,000      0.20%      = $150 annually, or 0.20%

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Layered Accounts

• Interest Checking            $10,000      0.20%• Phoenix (3 year rate)        $15,000      0.45%• Funds Management CD    $50,000      1.05%      = $600+ annually,

or 0.82% with funds rolling every 30 days to 6 months and with even more on the line as rates increase

Laddering Funds

• Finding comfortable and rewarding maturities.

• Flexibility vs. Profit. What do you need and on what horizon?

• CDARS can be an excellent way to handle endowments.

TM Contact Information

Steve Krohn – EVP and Managing Director TM & Private Banking

• steve.krohn@vnb.com or 817-8648 or cell 987-4600

Ginger Germani – TM Officer

• ginger.germani@vnb.com or 817-8622 or cell 987-6198

Carrie Gillispie – TM Representative

• carrie.gillispie@vnb.com or 817-8655 or cell 906-9290

Brooke Jenkins – Merchant Card Representative

• Brooke.jenkins@vnb.com or 817-8650 or cell 987-6202

Thank you